In the
last decade or so, petroleum (oil) has claimed the top position in
Nigeria’s export list, constituting a very fundamental change in the
structure of the country’s international trade.
Oil prospecting began
in Nigeria as far back as 1908 but production and export started in 1958
in Shell’s field located at Oloibiri. Other companies joined soon
after independence and the number of oil producing and exporting
companies now stands at about 11.
The
share of oil in total export value rose from less than 1 per cent in
1958 to a peak of 97 per cent in 1984 and has not been less than 90 per
cent since then. In the first half of 1990, it accounted for over 95
per cent of total exports and its share of GDP has ranged between 25 and
30 per cent in recent years.
Nigeria produces about 2,000,000 million barrels per day and is the sixth largest oil producing country in the world.
The
petroleum industry is usually divided into three {3} major components,
upstream, midstream and downstream. Midstream operations are usually
included in the downstream category.
The
downstream oil sector is a term commonly used to refer to the refining
of crude oil and the selling and distribution of natural gas and
products derived from crude oil. It cuts across manufacturing,
marketing, sales, distribution, transportation and haulage.
There
are significant investment opportunities in the downstream sector of the
oil and gas industry in Nigeria. Statistics have it that there are over
six thousand {6,000} independent petroleum products marketers and six
{6} major marketers of distributing and marketing petroleum products
across the country.